Success through digital requires a shift in mindset. And internal capabilities need to be analyzed and addressed to determine readiness for change. Organizational silos that slow decision making need to be eliminated and a common direction has to be agreed upon when embarking on such a transformation journey. As revealed by our study, nearly all of the analyzed Nordic banks are particularly concerned of three potential roadblocks that might limit their ability to digitize their operating model; First, the high level of cultural transformation required from a product and transaction based business model into an agile, customer oriented information technology company. Second, the inability to transform their workforce’s capabilities to meet the constantly evolving needs of customers and technological change. Third, the legacy infrastructure is seen as a key obstacle to accelerate the transformation.
It’s clear from our findings – Banks need to adopt digital. But how should they balance priorities between profitable growth in the short term and the necessary investments for long-term transformation? The challenge should not be underestimated. Most banks expect their value chains to be transformed within the next five years, and nearly all (88 percent) need to rethink their current strategy and business model to compete in the new environment. But less than 40 percent have a clear digital transformation plan in place. To balance short and long-term plans, independently of business model ambition, Nordic banks need to: execute on five levels to capture the benefits of digital business as illustrated by the digital value tree.